AgTech – does sensor adoption make ‘cents’?
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AgTech – does sensor adoption make ‘cents’?

Agricultural technology is rapidly developing and is set to change the face of farming, however the current uptake of ‘sensor technology’ among Australian farmers is limited, according to a report by agribusiness banking specialist Rabobank.

Drawing on insights from 1000 farmers across Australia, the recently-released report, Does sensor adoption make cents?, says despite the potential of digital agriculture to improve decision-making and profitability of Australian farms, the use of sensor technology – a widely-available form of digital agriculture – remains modest. And of those that use the technology, only a limited proportion of farmers are using the data to support farm decision making to increase business profitability.

Questioning farmers across a wide range of regions, production sectors and operation sizes (during its regular quarterly survey of rural sentiment) , Rabobank found less than a quarter (23 per cent) were using sensor technology – such as drones, moisture probes and irrigation monitors, as well as yield mapping and electronic identification (EID).

Report author, Rabobank agricultural analyst Wesley Lefroy said while he was not surprised by the relatively modest uptake of sensor technology on-farm, there were “clearly barriers to adoption that are holding back the farm sector from receiving the value promised by digital agriculture”.

“For many farmers, the value proposition (or return on investment) for many sensor technologies simply isn’t articulated clearly enough for farmers to determine they can generate a profit from it,” he said.

Mr Lefroy said the uptake appeared to be higher amongst larger farm businesses, with the survey finding large farms (with incomes above one million) to have the highest uptake of sensors at 57 per cent – compared with a 10 per cent uptake in farming businesses with incomes below $300,000.

The adoption rate did vary across commodity sectors however, with the highest rate of sensor adoption observed in the cotton industry (78 per cent) followed by the grains sector (48 per cent).

In contrast, adoption rates were very limited in beef (10 per cent), sheep (12 per cent) and dairy (20 per cent) – with these sectors generally having a higher proportion of small-scale producers.

“We also anticipate the significant cost, time and knowledge which is needed to extract value from some livestock orientated technology is limiting uptake,” Mr Lefroy said.

Closing the gap

Mr Lefroy said the survey found not only was farmer uptake of this type of digital technology limited, but less than 70 per cent of those using the technology were applying the sensor-generated data to support farm decision-making. “This clearly demonstrates the gap that exists between collecting the data and applying it to assist with farm management decision-making,” he said.

And even fewer farmers are converting the data into profit, he said, with the less than 40 per cent identifying an improvement in profitability from the use of sensor technology.

“Take yield mapping, for example,” Mr Lefroy said. “While most harvesters now have yield-mapping capabilities, it is often a difficult process for farmers to not only collect the data (given the volume of data) but to then process it and interpret the results, and put it into a usable form to support decision-making.”

In order to “close the gap” so farmers fully understand how to use the data and generate profit from it, there are two main issues that need addressing, he said.

“At the farmgate, there needs to be an increased emphasis on having adequate technological resources, and this goes beyond software and hardware management, as farmers also need to have the skills to analyse the data. But for farmers to make this investment, in both time and money, the value proposition of using this technology needs to improve,” he said.

“Tech companies have a big role to play in this, to ensure farmers can easily use the data to assist with decision-making, so ‘after-sales service’ is critical.”

Mr Lefroy said in the age where farmers are generating more and more data, the ownership of data and privacy issues were another concern, while many agricultural producers also lacked the technological infrastructure and connectivity required to fully utilise farm management technology offered by vendors.

Rabobank Australia & New Zealand Group is a part of the global Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has nearly 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 40 countries, servicing the needs of approximately 8.6 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 94 branches throughout Australia and New Zealand.

Media contacts:

Denise Shaw
Head of Media Relations
Rabobank Australia & New Zealand 
Phone: 02 8115 2744 or 0439 603 525 

Skye Ward
Media Relations Manager
Rabobank Australia
Phone: 02 4855 1111 or 0418 216 103